Tesla CEO Elon Musk recently admitted that he thinks the stock is overvalued. But by setting these benchmarks and beating them, the company is building credibility.

Tesla also began taking reservations for the Model S in China and expects to begin making deliveries in Q1 2014.

Gross margin increased to 22% on a non-GAAP basis, excluding ZEV credits and 24% on a GAAP basis.

In the fourth quarter, Tesla expects to deliver slightly under 6,000 Model S vehicles. They raised their 2013 worldwide deliveries to 21,500 vehicles.

The shareholder letter also mentioned that "Tesla is pioneering a new approach to vehicle servicing that we believe will revolutionize the customer experience." No details were however revealed.

Tesla recently opened its Supercharger Corridor that extends along the West Coast. These chargers work much faster than the typical EV charger and Tesla has been careful about their placement too. Both factors had previously been obstacles to consumers hesitant to make the switch.

"Customers cite the ability to supercharge as one of the top 5 reasons they choose a Tesla," Musk and CFO Deepak Ahuja pointed out in the shareholder letter. Tesla is now expanding its Supercharging network to Scandinavia and Europe.

The stock was up 1% to $176.85 today. It is up over 400% year-to-date.